Maruti Suzuki surges 8% in 2 days; stock nears record high on strong Q2FY23

Shares of Maruti Suzuki India climbed nearly 3 per cent to hit a fresh 52-week high of Rs 9,737.40 in Monday’s intra-day trade, after the auto-maker reported a strong September quarter results (Q2FY23). The stock has surged 8 per cent in the past two trading days.

The stock of automobiles major traded close to its record high level of Rs 10,000, which it had touched on December 20, 2017. In the past one week, it has rallied 11 per cent, as compared to 1.2 per cent rise in the S&P BSE Sensex.

Maruti Suzuki India’s consolidated net profit jumped 334 per cent year-on-year (YoY) to Rs 2,112 crore in Q2FY23, driven by resolution of chip supply issues, highest ever unit sales, and favourable foreign exchange rates.

The profit performance was also driven by higher operating margins as well as higher other income. EBITDA margins, meanwhile, was up 204 bps quarter-on-quarter (QoQ) to 9.3 per cent in Q2FY23.

"The company’s unit sales jumped 36.32 per cent YoY to 517,395 units in Q2FY23, while exports stood at 63,195 units. The sales revenue jumped 48 per cent to Rs 28,545 crore YoY. The pending customer orders were around 412,000 vehicles at the end of Q2, of which 130,000 pre-bookings are for recently launched models," the company said.

Therefore, analysts at ICICI Securities retain their 'buy' rating tracking industry tailwinds of underpenetrated PV segment domestically, benign RM price outlook, and robust order book.

"The robust demand in SUV space aided by model refreshes, bookings for higher end models and sequential uptick in ASPs. New product launch pipeline along with robust order backlog of >4 lakh units, of which ~130,000 vehicle pre-bookings are for recently launched models. Going forward, we expect outperformance from UV portfolio," the brokerage firm said, sharing a target price of Rs 11,200 per share.

Meanwhile, analysts at Motilal Oswal Financial Services (MOFSL) believe that the company is on a strong footing for recovery in market share and margin as launches gain traction and chip shortage issues resolve.

"The strong demand and favorable product lifecycle for Maruti Suzuki India augur well for market share and margin. We expect a recovery in both market share and margin in H2FY23, led by an improvement in supplies, favorable product lifecycle and mix, RM and currency-related benefits, and operating leverage," the brokerage firm MOFSL said.